Get ready for the best tax season yet

The tremendous changes brought about in 2020 impacted individuals and businesses alike. From record unemployment filings, to stimulus checks and PPP, to tax deadline changes — the resulting impact of COVID-19 made for a tumultuous year. Be sure that you have access to the most up-to-date information regarding tax legislation and deadlines, as well as corresponding forms, with an integrated and accurate research and tax software system.

Resources backed by smart solutions that offer examples, videos, webinars, and illustrations can help you to fully grasp the concepts and get the answers you need to better serve your clients. Cutting edge technology also helps retain junior employees who expect access to the best in modern online tools.

As technology continuously evolves, many firms struggle to keep up with the changes. According to Accounting Today (The profession’s biggest challenges, Accounting Today Magazine), changes in technology are the top issue keeping accounting firm leaders up at night.

Integration is one element that is increasingly important because it can simplify the day to day workflow of a tax professional. Having up-to-date information in one place makes all the difference when trying to increase work efficiency. Lack of integration can also be seen when staff have to re-key data from multiple sources, as this is time consuming and can cause errors. Implementing intuitive research tools in your existing tax platform is also important to speed up research processes and allow for a quicker, more accurate response to clients. When smart software replaces manual research processes, you’ll have more time to focus on what matters most: serving your clients as trusted advisors and growing your firm.

Although there are many tax software programs out there, in-context research capabilities with built in answers are often difficult to find, or not there at all. Instead of leaving your tax software process to go seek answers elsewhere, smarter technology focuses on getting accurate answers to you quickly. Having confidence in the answers you find allows for increased time to spend with a more strategic advisory focus. Being able to market these benefits to clients can build a tremendous amount of trust and make your firm stand out among the competition.

It’s no secret that finding and retaining clients can sometimes feel like an impossible task. In the digital age, competitors such as do-it-yourself (DIY) online preparation tools could be eating into your client base. However, the challenges of 2020 have created the perfect opportunity for firms to reach out and connect with potential clients. Small businesses are looking for answers now more than ever.

How do you gain and retain clients in today’s climate of change? You strengthen relationships to show clients it’s worthwhile to utilize your firm’s knowledge and expertise to assist them. It’s important that you position yourself as more than a one-time advisor. You should be a partner they can always turn to for support.

The tax and accounting market, along with client expectations, can change quickly. A recent small business study published in Accounting Today Magazine (A small-business barometer for 2019, Accounting Today Magazine) showed that 78% of small business clients ranked accounting professionals being “trusted advisors” as very important. It’s no longer enough to simply do taxes. Having an honest, open, and understanding relationship with your client will benefit both them and your firm during both the busy season and the off-season.

One of the best things a firm can do to strengthen its relationship with a client is to put an emphasis on open communication. It’s easy to get into the habit of assuming you know what your client wants, but asking them outright can prevent future miscommunication and show them you are invested in their needs, building a strong relationship for years to come.

Having a strong relationship with a client can help you weather the changes that the client goes through. It’s easier to retain clients than it is to find new ones, so make sure they’re happy with your service. One way to do this is by conducting customer journey mapping. The off-season is a good time to create a visual representation of your journey with your customer, so you can see the best way to get them from where they are to where they want to be going forward. Another way to do this is by surveying your clients. Send out a survey quarterly to ensure that you are giving your client what they expect. If not, make sure your firm uses the feedback you receive to make any necessary changes.

This year, it may be a good idea to proactively reach out to clients before tax season begins to ask if there have been significant changes you need to be aware of.  For example:

• Were they unemployed for any length of time and collecting employment benefits?
• Were their businesses impacted by closures?
• Did they receive PPP?
• Were there significant stock losses?

You may also want to ask if they would like to receive more electronic communications and consider e-filing (if they haven’t before), in order to limit the need for in-person appointments.

There are many DIY programs for tax preparation that may seem less costly to clients than your firm, so it’s important to go the extra mile to show them why they should choose you. Instead of simply saying that TCJA changes may affect their returns, explain to them what is changing and why.

Keep your clients informed throughout the year, via email or newsletters about any new changes too, so they can know what to expect for the coming tax year. In addition, if your firm fees increase, you need to show justification for that extra level of service. Showing your clients that your firm is worth the investment in all aspects is vital to a healthy client relationship.

Being more strategic and proactive in your offerings and communication with clients is imperative, not just as their “tax person,” but also to build a reputation of expertise throughout the year. By improving ease of use and sharing information via newsletters and your website, or other means, you can proactively build and strengthen client relationships.

Using customer journey mapping, newsletters, and surveying are all beneficial ways for you to connect with your customers on a deeper level. Additionally, make working with your firm easy for your client. Help them understand what you’re doing for them and what it means for their finances for the next tax year, as well as over the long haul. It may seem like extra work but nurturing that relationship will be extremely beneficial to your firm in the long run.

With the known increase in cybersecurity breech attempts, and a firm’s ability to collect and store vast amounts of data, tax firms need to continue to educate themselves on how to protect their client’s data and their system as a whole.

Most firms believe they have adequate security measures in place, but according to the IRS in a survey from 2018 (Data Privacy and Cyber Security for Tax Professionals, IRS Nationwide Tax Forum 2018), 52% of small and medium businesses experienced a ransomware attack in the past year, up from 2% the previous year. While portal passwords and timeout periods used to be enough, more steps now need to be taken to keep your firm and client information safe.

Do you have a security action plan in place? Small firms may be especially vulnerable to risk without the best security measures; there is nothing worse than finding out too late that your security has been compromised. To set up and maintain a foundation of security, and avoid potential breeches, all firms, regardless of their size, need to take the time to create a Written Security Plan (WSP). In fact, a Written Security Plan (WSP) is required under the Gramm-Leech-Bliley Act (GLBA). In addition to complying with this legislation, creating a WSP allows all staff to be on the same page as to what actions to take when they believe a breech has potentially occurred. This is a great aspect to develop during the off-season and to check periodically to make sure security strongholds are in place.

Staying up to date with current information within the security space is also a crucial step for tax and accounting firms as the “bad guys” keep getting smarter with different techniques to steal sensitive data. It’s a good idea to subscribe to IRS email updates tailored towards tax professionals, to ensure your firm stays current on the latest security news. Additionally, the IRS provides a wealth of great resources to help firms grasp current legislation and what can be done better to provide the best in information security. Take advantage of these resources.

Think through your firm’s entire process of requesting and receiving information such as return preparation, review processes, and delivery/e-filing to find any area(s) of weakness. Setting standards for your firm’s tax return process and using a secure portal or encrypted file transfer methods makes it easier to see when something is suspicious. For example, if you receive emails with attached documents, or texts or phone calls with potentially fraudulent claims to offer or receive private information from an untrusted source, this could be someone phishing for information.

It is essential to implement strong security measures in order to keep client’s trust by ensuring that their data is secure. This allows your firm, regardless of size, to create a reputation as a top-notch tax professional firm. Taking the time to keep strong security measures in place may seems tedious, but it’s worth the effort to reduce any threats by diminishing the liability to your firm, employees, and clients.

Some firms are losing talent or are unable to attract new employees because they have yet to implement user-friendly, updated technology into their workflow processes. People would rather join a team with access to digital tools that allow them to focus on client delivery, rather than menial tasks and data entry. Many firm staff members feel chained to the office to complete their work and may prefer secure access to their work remotely. Planning for growth as a firm means progressively accommodating the changing modern digital expectations of both new and longstanding employees.

According to The AICPA’s CPA Horizons 2025 Report based on insight from more than 5,600 CPAs, successful CPAs must continue to evolve as strategic partners of clients, business and employers, applying multidisciplinary and integrated problem solving into their services to expand traditional services and enhance comprehensive offerings to become trusted advisors.

People generally don’t want to stay at a firm if the work-related technology is not available like the standard intuitive applications that we all have access to in daily life. Employees in a digitally transforming world want easy, secure access to data driven information when they need it at any time. It’s a worthwhile investment to implement accessible technology, so you can ensure your employee’s productivity and retain them. Doing so will help push your company to grow while also providing opportunities for ongoing education and symbiotic relationships with your employees. Giving your employees more efficient resources to perform their work saves time and money overall for your firm, positively impacting your bottom line.

Moving forward, technology that enables remote work and communications is more critical than ever and won’t be changing back anytime soon, if ever. Remote working is a huge perk in the eyes of employees and became an accepted necessity by many companies and firms in 2020. Seventy-eight percent of employees say flex schedules and remote work is second only to pay as an effective retention tool (Work-life integration: the customized approach, Crain's New York Business). Plus, the old school thought that remote workers aren’t as effective as those in the office isn’t reflected in the data. Remote workers are often 20- 25% more productive than in-office team members. And worker absences increase when remote work is banned (Why Are Companies Ending Remote Work? SHRM 2019).

Utilize technology so your team can better serve their clients by providing more value, which may in turn give you the ability to charge more for your services. This goes back to the idea of serving your client all year, not just during tax season, as a tax expert. Growing your relationship with clients will help profitability increase exponentially over the long haul to beat your competition. A key consideration this year is to actively encourage clients to e-file, in order to reduce in-person meetings and avoid any potential postal service delays. Utilizing a tax software program that efficiently processes tax forms and allows for easier client communications and e-filing is one way to give clients, as well as staff, more peace of mind.

In this way, you can target top talent by offering your employees best-in-class tools. Keep employees happier by reducing non-billable hours for improved utilization rates and better margins. Focus more on client delivery by utilizing software that allows employees to focus on the meaningful work of building strong client relationships while maintaining a good work/life balance. These are important to employees. Access to content enabled technology allows for not only a more efficient workflow, but also can assist your employees in being more productive.

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